Money Lessons For Your Kids

If you have kids and aren’t teaching them about money, you’re setting them up to be one of those clueless college kids with a free burrito and $12,000 in credit card debt. Don’t do it!

Leo at Zen Habits has put together a bunch of lessons you can teach your kids. Teach them now; avoid paying their bills later.

We like this one:

Teach them about advertising and consumerism. This is something that should be taught at home and in the school, because most of us grow up without really being aware of the effects that advertising, marketing and consumerism has on us, and on our spending. This is often the root of our financial problems, whether we’re young or old. Teach them about the goal of advertising: to get us to buy their products or services, and to get us to spend our money. And show how advertising affects us, and gets us to do that. And talk about consumerism, and how it hurts us financially, how it’s not good for the environment, and how it leads to a cluttered house full of expensive and wasted stuff.

How is advertising not good for the environment?!?! How else would I know that I can buy carbon credits to become carbon neutral!

It’s outside the topic of the article, but I’d go one step further and teach my kid about being a good media consumer in general. I don’t remember the stats from my journalism classes, but a large percentage of stories on the news are pre-written press releases which are rarely fact-checked. Just as good as ads. Cartoons are essentially 22-minute commercials. Teach how pervasive advertising is.

How about don’t let them think you will step in to pay their bills, either. When I was a stupid college kid, my parents didn’t bail me out or pay my bills. Almost $30K in debt paid off later, they still haven’t helped. When I did ask if I could borrow some money to pay off a tax debt (joint with my now ex-husband) they demanded access to all my finances to see where the money was going. With that kind of scrutiny, your kids won’t want to try to borrow or have you pay things off ;)

The day I turned 16, my mom handed me a set of keys to a family car, a credit card (hers, and I was an authorized user), and said “enjoy doing the grocery shopping. Oh, and remember that I can see the credit card bills.”

She set all of us up early on with lessons in how to use the CC correctly, how to watch our money, and how to save. Invaluable lessons. My brothers and I are now 28, 25, and 22. My older brother owns 3 houses, my only debt is a $5k loan on my car, and my little brother has enough money saved to allow him to pursue his dream of being a filmmaker. I call that good money management lessons from mom.